Standard Chartered pays £205m over 'rogue' claim

BRITAIN'S Standard Chartered bank is to pay £205million to settle claims it violated US sanctions against Iran and other countries.

Standard Chartered will have to pay millions to settle allegations that it breached sanctions

The agreements announced by the Federal Reserve yesterday draw a line under allegations that shocked the City and cast a cloud over the FTSE-100 group which was accused of being a "rogue institution".

Standard Chartered is to pay £63million to the Federal Reserve over claims it provided "inadequate and incomplete responses" to bank examiners and insufficient oversight of anti-sanctions measures.

Separately it will pay £142million to settle claims by the US Department of Justice (DoJ) and the New York District Attorney.

The US Treasury Department, which alleged sanctions against Burma, Sudan, Iran and Libya were breached, said its £83million penalty was included in the payment to the DoJ.

Last night the shares closed 12p higher at 1497½p. The move comes three months after the bank agreed to pay £213million to resolve a related case brought by the New York Department of Financial Services (DFS).

Banks occupy positions of trust. It is a bedrock principle that they must deal honestly with their regulators

New York District Attorney Cyrus Vance

Standard shares plunged by a quarter to 1228p in August after the DFS broke ranks with other US regulators to accuse the bank of helping Iran hide 60,000 transactions worth £150billion from the authorities.

DFS boss Benjamin Lawsky accused it of being a "rogue institution".

Announcing the deal, the Federal Reserve said the orders addressed "unsafe and unsound practices" related to inadequate responses to examiner inquiries and "insufficient oversight" of anti-money-laundering requirements.

New York District Attorney Cyrus Vance said: "Banks occupy positions of trust. It is a bedrock principle that they must deal honestly with their regulators."

Standard Chartered pointed out the settlements were the product of its own internal investigation that led it to report voluntarily its findings to US authorities followed by nearly three years of intensive co-operation with regulators.

It said the vast majority of the 60,000 payments did not appear to have violated Iran sanctions but from 2001 to 2007 it processed £15million of transactions on behalf of Iran parties and £68million in other countries that appeared to violate sanctions laws.

In that period its New York office processed deals worth £86trillion.

Since the events covered by the settlements it had made a "comprehensive review and upgrade" of its compliance systems.